Contractor Acquired Property

[secaucus]

Prior to completion, a CPFF contract is converted to FFP. What impact, if any, is there to title transfer of Contractor Acquired Property?

[ji20874]

Have you read the contract clause at FAR 52.245-1?

Onoe supposes the parties to the contract will discuss this matter as part of the conversion negotiation, within the bounds of the contract clause. If this matter isn't discussed, then the clause speaks for itself in its paragraph ( e ). I suppose para. ( e )( 3 ) will apply to property acquired before the conversion, and ( e )( 2 ) will apply to property acquired afterwards.

[here_2_help]

I think ji20874 has the right of it. Putting my interpretation of the clause language into words:

1. For CAP acquired when the contract was Cost type, title passed to the government upon submission of the voucher that contained the costs of those items. Those items belong to the Government.

2. For CAP aquired when the contract is FFP (or for CAP acquired whose costs were not included in an voucher), title is retained by the contractor unless the contract specifies otherwise. Those items belong to the Contractor.

Since it's Government Property, I'm probably taking an overly simplistic approach that ignores a myriad of nuances. I'm ready for the functional specialists to correct me.

H2H

[joel hoffman]

Prior to completion, a CPFF contract is converted to FFP. What impact, if any, is there to title transfer of Contractor Acquired Property?

I'm not exactly sure what you are asking when you asked about an "impact".

I think H2H and ji stated the general principles pretty well. Here is what FAR 45 says regarding title to CAP.

45.402 -- Title to Contractor-Acquired Property.

(a) Title vests in the Government for all property acquired or fabricated by the contractor in accordance with the financing provisions or other specific requirements for passage of title in the contract. Under fixed-price type contracts, in the absence of financing provisions or other specific requirements for passage of title in the contract, the contractor retains title to all property acquired by the contractor for use on the contract, except for property identified as a deliverable end item. If a deliverable item is to be retained by the contractor for use after inspection and acceptance by the Government, it shall be made accountable to the contract through a contract modification listing the item as Government-furnished property.

( b )Under cost type and time-and material contracts, the Government acquires title to all property to which the contractor is entitled to reimbursement, in accordance with paragraph (e)(3) of clause 52.245-1.

If you negotiated the conversion from CPFF to FFP and paid full cost of certain property that has a net residual value or salvage value, then I'd say that it becomes government property. I think that is consistent with the above and with what H2H said. On a large construction contract years ago in Saudi Arabia, the government paid a contractor the full cost of a concrete paver plant and molds and for a paving machine for use on some contract change work. When the contractor demobilized, as it was loading this equipment and plant up, we directed it to leave this equipment on-site. It may still be sitting in the desert.